The European Investment Bank said its board has approved a $53m loan to Sofia municipality to finance the construction of a new combined heat and power (CHP) plant to serve the Bulgarian capital’s district heating network.

It’s just the latest in a series of funding drives by the Bank in decentralized energy initiatives. This week the board also backed financing proposals to modernise and reduce energy use in district heating in Krakow, and a 400kV electricity interconnector between Romania and the Moldovan capital Chisinau.

It also agreed to a new scheme to support energy and water efficiency investment by private householders in Portugal.

The Sofia plant will combust refuse derived fuel (RDF) to be produced at the municipality’s new waste management facility, feed its electricity into the public grid, and provide heat to the district heating system of the Bulgarian capital city operated by Toplofikacia.

The total estimated cost of the construction of the plant is $159m (EUR135m).

The project is likely to be co-financed under the Operational Programme Environment during 2014-2020 and it is on the JASPERS action plan to support the preparation of the grant application, the EIB said.

The new plant will partly replace heat generation in existing natural gas fired installations, according to the project description and the plant is the final phase of the integrated Sofia Municipal Waste project.